news How much will Bemidji save due to the elimination of city's community development director?
The Bemidji City Council voted 4-3 in August to eliminate the position by 2010.
The entire budget for community development for 2010 was to be $103,666, according to Ron Eischens, the city's finance director....
Bemidji, 56619

Bemidji Minnesota P.O. Box 455 56619

2012-08-06 12:35:21

How much will Bemidji save due to the elimination of city's community development director?

The Bemidji City Council voted 4-3 in August to eliminate the position by 2010.

Advertisement

Advertisement

The entire budget for community development for 2010 was to be $103,666, according to Ron Eischens, the city's finance director. Of that amount, $89,000 was budgeted for salary and benefits for Rita Albrecht, the community development director.

But the city will be required to pay unemployment benefits after Dec. 31, Albrecht's last day.

Unlike private companies, which make regular payments to the state of Minnesota toward unemployment benefits, the city is on a "pay-as-you-go" basis.

The city of Bemidji only pays unemployment benefits when a former employee files for them, Eischens said.

Eischens is estimating that unemployment benefits for Albrecht will cost the city $566 a week for up to 52 weeks, which would total $29,432.

Of course, it is not certain that benefits would extend all 52 weeks. If Albrecht were to accept a new position at the same or higher salary, Eischens said, the city would only pay unemployment up to that point.

A calculation would be used to determine the percentage of unemployment necessary if her new position did not offer the same salary, he noted.

City staff plans to keep $25,000 in the budget for professional services that may be required for community development.

The City Council would be made aware of any withdrawal from that fund, Eischens noted in the Weekly Newsletter released last Friday.

The only expenditure known to probably be necessary from that fund are dollars to contract for services to assist with the Quality Neighborhood Initiative.

Bonestroo, out of St. Paul, has been hired for $48,000 to complete the QNI study and develop a set of Best Practices.

Bonestroo's proposal, however, included an expectation of assistance from city staff.

City Manager John Chattin has said that some city staff time will be available, but additional contracted time from the Headwaters Regional Development Commission may be required in 2010.

Following Bonestroo's work, HRDC would then be contracted to implement the Best Practices. The contract with the HRDC will be negotiated at a later date.

If the city were to pay all unemployment benefits for Albrecht for one year and spend all $25,000 for community development needs, the total cost would be $54,432.

Subtracted from the previously budgeted $103,666 for community development (including Albrecht's salary), the savings would be $49,234.

Direct levy link?

Eischens' memo to the council in last week's newsletter explained the effect the community development decision had on the city's surplus budget.

There will be a surplus fund of $58,167 in the 2010 budget, if the 19.9 percent preliminary tax levy is adopted next month as a final levy amount.

The tax levy of 19.9 percent represents the maximum amount the city can levy and recaptures the dollars lost through unallotted Local Government Aid dollars from 2008 and 2009, according to Eischens.

The elimination of the community development director position has more effect on the surplus budget than the tax levy, Eischens said Tuesday.

It would be very difficult to calculate a direct impact from the loss of the job on the tax levy, he noted.